DAX set for a cautious start to the week as Apple needs to deliver

As the new trading week gets under way, investors are hoping for a welcome change in the form of positive corporate earnings, particularly from Apple, which is due to report its results this evening. Falling crude oil prices and continued investor interest in German blue-chip stocks could provide additional support for the Frankfurt market.

US midterms and economic data in focus

However, investors are facing an eventful trading week. Alongside numerous corporate announcements, economic data and political developments will take centre stage. Tomorrow's US midterm elections, in particular, are likely to attract considerable attention. Should the Republicans lose their majority in Congress to the Democrats, this could significantly restrict the US administration's ability to implement its political agenda. At the same time, the results would be seen as an important barometer of the broader political landscape in the United States. Financial markets must therefore prepare for additional uncertainty.

Important catalysts are also expected on the economic front. Upcoming US purchasing managers' indices (PMIs) and inflation data will provide further insight into the resilience of the American economy in the face of elevated energy prices and persistently restrictive interest rates. Following the latest central bank decisions, investors will be paying particularly close attention to whether price pressures are genuinely easing, potentially creating greater scope for a less restrictive monetary policy stance.

AI investment faces an earnings test

Technology and semiconductor stocks, however, remain at the heart of market activity. The latest earnings season has demonstrated just how sensitive investors have become to elevated artificial intelligence (AI) investment spending and disappointing corporate outlooks. At the same time, demand for companies offering convincing growth prospects remains strong. Investors have by no means abandoned the AI growth story, but they are increasingly demanding tangible evidence that multibillion-dollar investments can deliver meaningful financial returns.

DAX eyes the 26,000-point mark

For the DAX, this could translate into a positive start to the week. The combination of declining oil prices, steady demand for German equities and positive cues from Asian markets also opens up the possibility of a sustained break above the 26,000-point mark. From a technical perspective, the DAX is initially expected to trade within a range of 25,750 to 26,050 points on Monday.